Age Pension Calculator

How the Age Pension Means Test Works

The Age Pension uses a two-test system to determine how much you receive. Services Australia calculates your entitlement under both the income test and the assets test, then pays you the lower of the two results. If either test reduces your pension to zero, you receive nothing — even if you would qualify under the other test alone.

To be eligible for the Age Pension, you must be at least 67 years old and have been an Australian resident for at least 10 years, with at least 5 of those years continuous. You must also be in Australia on the day you lodge your claim. Some exemptions apply for people with qualifying residence in countries with international social security agreements.

Age Pension rates are indexed twice a year — in March and September — to keep pace with the cost of living. Indexation is based on the higher of the Consumer Price Index (CPI), the Pensioner and Beneficiary Living Cost Index (PBLCI), or the Male Total Average Weekly Earnings (MTAWE) benchmark (ensuring the pension stays at 28.4% of MTAWE for couples). The rates in this calculator reflect the March 2026 indexation.

Income Test and Deeming Rules

The income test assesses your fortnightly income from all sources — employment, investments, deemed income from financial assets, superannuation income streams, and overseas pensions. If your total assessable income is below the income free area, you receive the full pension. Above the free area, your pension reduces by 50 cents for every dollar of income over the threshold.

• Single income free area: $218 per fortnight ($5,668 per year)
• Couple combined income free area: $380 per fortnight ($9,880 per year)
• Taper rate: 50 cents per dollar above the free area

How Deeming Works

Rather than assessing the actual returns on your financial assets (bank accounts, shares, managed funds, superannuation in pension phase), Services Australia uses deeming — a standardised rate of return applied to the total value of your financial assets:

• First $64,200 (single) or $106,200 (couple): deemed at 1.25% per year
• Balance above that: deemed at 3.25% per year

The deemed income is then added to your other assessable income for the income test. This means if your actual investment returns are higher than the deeming rates, the excess is not counted — and if your returns are lower, you are still deemed to earn at those rates.

Work Bonus

The Work Bonus allows Age Pension recipients to earn up to $300 per fortnight from employment without it counting towards the income test. This is in addition to the standard income free area, effectively giving working pensioners a higher income threshold before their pension starts reducing.

Any unused portion of the $300 fortnightly Work Bonus accrues into an income bank, up to a maximum balance of $11,800. New pension recipients start with a $4,000 opening balance in their Work Bonus income bank, giving immediate additional capacity. The Work Bonus only applies to employment income (wages, salary, or net self-employment income) — it does not apply to deemed income, rental income, or superannuation income streams.

Assets Test

The assets test counts virtually everything you own — bank accounts, shares, managed funds, superannuation, investment properties, vehicles, caravans, boats, and household contents. The major exclusion is your principal home (the home you live in), which is not counted as an asset.

If your total assessable assets are below the lower threshold, you receive the full pension. Above that, your pension reduces by $3 per fortnight for every $1,000 of assets above the threshold. The pension cuts out entirely at the upper threshold (cut-off).

The $3 per fortnight per $1,000 taper means that for every $1,000 in assets above the lower threshold, your fortnightly pension is reduced by $3. For example, a single homeowner with $400,000 in assets is $78,500 over the threshold — their pension reduces by $78.50 × $3 = $235.50 per fortnight.

Non-homeowners receive higher thresholds — currently $258,000 higher than homeowners — to account for the fact that they need to fund their housing from their assets.

How It Works for Couples

When both members of a couple are eligible for the Age Pension, Services Australia assesses your combined income and combined assets. The couple income free area is $380 per fortnight (compared to $218 for singles), and the pension reduces by 50 cents for every dollar above that combined threshold.

Couple asset thresholds are approximately 50% higher than single thresholds — for example, $481,500 vs $321,500 for homeowners. The maximum combined couple rate is $1,810.40 per fortnight ($905.20 each), which is about 1.5 times the single rate of $1,200.90.

Both members of the couple must have reached Age Pension age (67) to receive the full couple rate. If only one partner has reached pension age, the eligible partner is assessed at the couple rate but only receives their individual half. The other partner's income and assets are still included in the combined assessment, which can affect the eligible partner's entitlement.

Frequently asked questions